1) Several financial ratios will not be affected in choosing the depreciation method and assumptions. a) Fact b) Bluff 2) The choice of depreciation method and assumptions concerning useful life and residual will affect the amounts that are reported on the financial statements. a) Fact b) Bluff 3) Is the process of deducting the total cost of something expensive you bought for your business. a) Depreciation b) Depreciation method c) Amortization d) Costing 4) The depreciation methods are Straight-line, Double-declining balance, Units-of-production Method, Sum-of-the-year’s-digits and Amortization a) Fact b) Bluff 5) The same depreciation method is not used for financial reporting and tax purposes a) Bluff b) Fact 6) The cost of an asset is allocated to expense evenly over its useful life a) Double-declining balance method b) Units-of-production Method c) Straight-line method d) Sum-of-the-year’s-digits 7) The allocation of cost corresponds to the actual use of an asset in a particular period a) Double-declining balance method b) Units-of-production Method c) Straight-line method d) Sum-of-the-year’s-digits

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